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Individuals unable to overcome barriers to labour force attachment are, depending on their circumstances, eligible for, and receive, income support in Canada. The large number of Canadians dependent on income support was, and remains, a pressing concern to both the federal and provincial governments. The federal government has reduced spending on income support through revisions to employment insurance eligibility and benefit levels. These were designed to motivate individuals who have the option of meeting their income requirements from the labour force rather than from government income support. Yet they also reflect federal government fiscal realities. Changes to employment insurance — unless both levels of government are effective in reducing dependence on government-provided income support — could increase the call for social assistance. This creates the risk of an unintended transfer of unsustainable costs from the federal government to provincial governments. For those on long term support, there are two fundamental constraints to meeting income needs from employment rather than from government support. The first is the lack of jobs in the economy and the second is barriers which individuals face in accessing available jobs. Most Strategic Initiatives reviewed focussed specifically on activities to reduce the impact of these constraints. The first section of this chapter highlights lessons learned from projects which contributed to the creation of new jobs in the economy. The next section is devoted to lessons learned from projects which address specific barriers which those on long term assistance face in accessing employment. 2.1 Job Creation Three Strategic Initiatives specifically focussed on job creation for both individuals who are already dependent on government assistance and those at risk of becoming dependent. One program provided wage subsidies for job creation and two provided training and loans to enhance self-employment. Wage subsidies The Strategic Employment Opportunities Program (SEOP) (Newfoundland) was designed to address both the lack of jobs in a province with a very high level of unemployment and poor access to jobs. The program used wage subsidies to create full-time jobs for individuals who would otherwise be at risk of future dependence on income support programs. The program encouraged new and expanding private sector firms to create jobs faster than their available capital might otherwise allow. In the non-profit sector, it funded initiatives which offered potential for sustainability through revenue generation or offered clear economic benefits in terms of development of valuable economic infrastructure. The wage subsidy program attempted to achieve two objectives — the creation of jobs and the hiring of individuals who would not otherwise have been hired. The literature review conducted for the evaluation indicated that general wage subsidies are more appropriate to support job creation in economies with significant potential for economic expansion than in other contexts. This suggests that the rationale for their use in Newfoundland and Labrador was high. Under the Strategic Employment Opportunities Program, the opportunity for effectiveness of these subsidies was enhanced by tying their allocation to the province’s strategic economic development plans. However, it is likely that they would have been more effective if they had been tied to local, as opposed to provincial, economic development plans. In this way, the subsidies could have addressed clearly identified local needs.
The literature review conducted for the Strategic Employment Opportunities Program evaluation also notes that general wage subsidies to support job creation will offer very limited benefits if not properly designed and targeted. Targeting reduces the risk that jobs created with program support would have been created even without program support (dead-weight loss) and increases the chances that these job opportunities go to those who are the focus of the program.
The literature review also notes that targeted wage subsidies have been most effective when they focus on providing opportunities for employing individuals with a perceived (but not an actual) employment disadvantage. In those circumstances, employers can be enticed to hire someone they might otherwise not have considered hiring and the employee receives the opportunity to demonstrate her/his productivity to the employer and is often retained by the employer beyond the period of the subsidy. Conversely, targeted wage subsidies (in isolation) are not typically effective with truly unproductive individuals since their employment will end with the subsidy.
The Strategic Employment Opportunities Program provided subsidies to employers in the private and non-profit sectors with differing results. The evaluation notes that, since projects in the private sector were assessed primarily on whether jobs were created through general wage subsidies, rather than on whether they encouraged employment of individuals with a barrier to employment through targeted subsidies, the program provides little evidence of the effectiveness of targeted wage subsidies for private sector employers. Subsidies to the non-profit sector bring the risk of creation of “make-work” projects. The program attempted to reduce this risk by funding initiatives which could generate sufficient revenues to be self-sustaining or support local economic development through the creation of infrastructure. In the Strategic Employment Opportunities Program, this risk was reduced by linking funding to the province’s strategic economic plan. However, this plan was relatively new and regional plans did not yet exist. As a result, the projects could not be linked to local, as opposed to province-wide, economic development initiatives. This was a barrier to the selection of projects. Nevertheless, the evaluation findings provide evidence that individuals were employed “in meaningful positions with potential for the long term.” Self-employment supports Two programs supported job creation through enhancing participants’ self-employment possibilities. The Graduate Employment/Self-Employment Program (GESEP) (Newfoundland) provided income support and entrepreneurial training to recent graduates who wish to establish their own business. A similar program was set up in Nova Scotia. However, this program — the Enterprise Development Option (DE) of the Compass program — targeted social assistance recipients, not students. It also provided training and loans to enable them to establish small businesses. Both self-employment initiatives represent innovative approaches to providing self-employment supports which were not otherwise available for the specific target groups. The Graduate Employment/Self-Employment Program served recent graduates who would not likely be eligible for self-employment supports under Employment Insurance (EI) Part II employment benefits and support measures. The apparent success of the program in encouraging the establishment of new businesses suggests that the program has contributed to reducing the risk of future dependency of post-secondary graduates. The cost effectiveness of self-employment support programs is questionable when benefits are provided to individuals who would not otherwise be receiving government support. The Graduate Employment/Self-Employment Program provided support to recent graduates who would not otherwise have been receiving government support. Thus, the program represents an additional cost to government. Although the literature suggests that self-employment programs work, they do not have a big impact. The cost-effectiveness of this type of program is questionable. Similarly, the Enterprise Development Option component of Compass was innovative since there had not previously been a provincial program to support self-employment initiatives for SARs. The evaluation indicates that the component is working as intended and that, overall, it has proven to be a valuable addition to the employment programming options available to SAR clients. However, given the complex nature of the target group — clients with a range of employment-related needs — concerns were raised about how best to support the client group in the development of business plans.
2.2 Addressing Barriers to Employment Long term dependence on income support is directly related to the lack of jobs and to barriers which individuals face in accessing available jobs. There are essentially three types of barriers to employment:
Individuals may face one or more barriers to employment. Those who have been on government assistance for a long time typically face multiple barriers to employment. For example, lack of training or low literacy levels may have lead to a long history of unemployment which may have sapped the individual’s confidence, resulting in greater motivational barriers to employment. These barriers may span several generations. Other individuals, such as unemployed youth or recently displaced workers, face more limited barriers to employment. However, many have only short-term prospects in the labour market and are at risk of long term dependence. Support through Strategic Initiatives may avoid the initial lengthy period of unemployment which might lead to a lifetime of marginal attachment to the labour force. This can prevent a long dependence from becoming established.
Strategic Initiatives supported activities to address both populations. However, the types of projects and the lessons learned from them are different. 2.2.1 Individuals Facing Single Employment Barriers Strategic Initiatives which supported those individuals who faced single, or limited, employment barriers tended to be single-faceted — that is they provide only one (or few) interventions for clients — and focus on preventing, rather than overcoming, long term dependence. Two programs, in particular, promoted very early interventions by providing employment supports to students or potential students before employment problems were established:
A third Strategic Initiatives aimed to prevent long term dependence but focussed on a target group which had begun to exhibit difficulties in accessing employment:
The rationale for these three programs is founded in the knowledge that well-educated youth without work experience are likely to experience difficulties obtaining employment in the future. The literature review for the Graduate Employment/Self-Employment Program evaluation provides evidence that prolonged unemployment may have serious negative consequences on the future contribution of youth to society and their own independence. The apparent success of the Graduate Employment/Self-Employment Program, for example, provides evidence that, for a relatively small investment, government can reduce the risk of future dependency of post-secondary graduates. Although the Graduate Employment/Self-Employment Program focussed on providing experiences to participants rather than the creation of jobs, the program appears to result frequently in ongoing incremental employment of participants with their program employer.
All three programs provided valuable work experience to youth. Although the experience was not necessarily career-related, the Student Work and Services Program evaluation provided evidence that realistic work experience can be more important than career-related experience. Wage subsidy interventions for this client group appear to be successful because of the nature of the barriers faced by the target group. The programs focussed primarily on students with two barriers to employment: high salary costs for graduates and their lack of experience. As a result of this lack of experience, employers need to invest in training/mentoring and this represents a significant investment. The wage subsidy allows the employer to seriously consider hiring a recent graduate because they can off-set the costs of integrating the employee into the workplace. The Graduate Employment/Self-Employment Program evaluation provides no evidence of greater or reduced effectiveness for the approximately one-quarter of program clients who were SARs and who may face more barriers to employment. The provision of targeted wage subsidies appears to be an ideal approach to addressing the employment barriers faced by recent graduates, particularly in areas like Newfoundland, where the school to work transition is hard because of the lack of jobs.
A key to the success of Student Work and Services Program was the tying of the program to continuing education. The program experimented with a new approach to ensuring that students who benefit from the program are those who are seriously planning on returning to school. A significant component of the compensation for students working under the program was provided in the form of tuition vouchers. Individuals placed with private sector employers received wages and a tuition voucher. Individuals placed with community agencies received a stipend and a tuition voucher. Youth participating in the program supported this use of tuition vouchers and early evidence suggests that participants were more likely to attend a post-secondary education institution than in the absence of the program. However, the value of this education in avoiding future dependency is unknown.
A second key to success of programs tied to continuing education was seeing the employer as a partner in the continuing education of the students. Nova Scotia Links of Success Nova Scotia 2000 established partnerships with the private sector to provide realistic employment experiences. It was important that the program respond to both employer and participant needs. Students need career-related experience with a potential for long term sustainability and growth. Employers have to develop a commitment to being trainers and educating partners, and training modules need to link work experiences with career planning, entrepreneurship and self-sufficiency.
A third key to success of these programs is that initiatives are tied to local economic development planning. Like the Newfoundland job creation program (Strategic Employment Opportunities Program), the Nova Scotia Links linked the allocation of wage subsidies to economic development plans. Linking support for the creation of infrastructure to local economic development plans helped to avoid funding “make-work” initiatives that might occur in non-profit organisations. However, both the Strategic Employment Opportunities Program and Nova Scotia Links evaluations noted that it is more important that this linking be done at a community/regional level and involve regional development authorities than at a province-wide level.
The evaluations noted a number of risks to the use of wage subsidies to facilitate job placements. There is a high risk of “make-work” occurring in placements, particularly with the non-profit sector. The risk, however, can be minimised by clearly communicating program goals to all partners and providing them with the necessary supports to make the goals achievable. In the Student Work and Services Program, non-profit employers understood the program’s objective to be primarily one of helping individuals attend school through the use of the tuition voucher. Consequently, little attention was paid to the equally important goal of providing realistic work experience. A realistic work experience exposes the student to a structured employer/employee relationship which involves, among other things, job interviews, work planning and performance evaluations. In the evaluation, most employers indicated that they could and would have pursued this goal if they had been aware of it. Some organisations indicated they would require support from program officials to pursue this goal effectively.
As with the Strategic Employment Opportunities Program wage subsidy program (Newfoundland), there is a risk of dead-weight loss if wage subsidies are not adequately targeted. The Nova Scotia Links appears to have helped students obtain career-related work experience, and encouraged employers (especially small, private sector employers) to undertake hiring which they might otherwise have not. The evaluation of the Nova Scotia Links found that although wage subsidies can help individuals with barriers to employment obtain employment, there is a high risk of dead-weight loss if they are not carefully targeted. In the initial year of Nova Scotia Links, the program included placement of large numbers of students in co-op programs, many of whom would likely have been employed without program assistance. Management attributed this to the fact that existing coop programs had the necessary infrastructure and employer network in place to react quickly when the new program was announced. Given that there was considerable pressure to disburse program monies early in the funding, the program had to build on existing infrastructure and networks.
There is also a risk that subsidies for hiring students can have a negative affect on other employees. Nova Scotia Links was particularly helpful to small businesses in the province and, because one program objective was to provide financial support to students returning to school, the program deliberately set wages above market-rate levels. This provided students with the possibility of funding a return to school. Experience indicated that employers in relatively low-wage industries/districts experienced difficulty with their regular work force because of the relatively high wages received by students. The evaluation suggests that, where employment programs seek to provide income to participants at above market-rate levels, alternate compensation forms may reduce the negative reactions of other workers. The evaluation proposed an alternative strategy similar to that used in the Student Work and Services Program in Newfoundland. In this program the negotiation of rates with employers is based on market rates, and the program provides an educational subsidy paid directly to the student consistent with the increasing cost of post-secondary education.
2.2.2 Individuals Facing Multiple Employment Barriers Other Strategic Initiatives addressed the employment needs of those facing multiple barriers to employment. This target group presents a much more complex problem to address. Formative evaluation results present less clear trends with respect to expected program results and, in some cases, the findings presented tend to be somewhat negative. The lessons learned reflect the fact that this is a particularly difficult population with which to work and the interventions are complex. There were essentially two types of initiatives proposed to address the needs of this target group: those which were single-faceted, offering one (or few) interventions for participants; and those which were more multi-faceted and included a broad range of personalised services and supports. The summative evaluation will help us determine how well each approach works with this client group. Single-Faceted Interventions Two programs offered a single-faceted approach to addressing the needs of participants who faced multiple barriers to labour force attachment:
To date, the evaluations of the Transitional Training Option component of the New Brunswick Job Corps program indicated limited successes in reducing dependence on long term government assistance. The Work Experience Option component evaluation suggested potentially more success. Although the wage subsidy offered under the Transitional Training Option component of the Compass program was relatively high, it appeared to provide an insufficient incentive for many SARs to leave the security of social assistance, especially when they had dependants. The evaluation noted that the component was not particularly suited to the needs of SARs who face multiple barriers to participation in the labour market, including lack of subsidised day care (affecting mainly single parents equally throughout the province), lack of transportation and/or travel-related expense coverage in most rural areas, and fear of losing drug plan benefits. The lack of incentives in place to encourage these clients to seek self-sufficiency became a significant barrier to the success of the Transitional Training Option component of Compass. The evaluation suggests that a different structure needs to be put into place to assist those who want to make a successful transition to work by increasing the wage subsidy level. However, the results might also suggest that employment-related programs cannot overcome the negative incentives to work which are built into the social assistance system, and that a more multi-faceted approach is required to address the negative aspects of dependence on social assistance. The evaluation noted that the provincial Department of Community Services was, in fact, undertaking a major review of income and employment support programs in order to come up with a new legislation that might resolve the issue of barriers to employment.
The Work Experience Option component of the Compass program, on the other hand, has been more successful in providing youth with an opportunity to gain up to six months of work experience in order to enhance their employability. Youth participants in this program presented multiple barriers to labour market attachment. They were on social assistance, had been out of school for two years, needed both entry level work skills and career development and were unprepared for more formal skills training. Yet, according to employers, the experience gained on subsidised work placements improved the employability of these youths. Like Graduate Employment/Self-Employment Program in Newfoundland, an unexpected result was the number of students who were offered employment after they had completed their placement period. As with the Graduate Employment/Self-Employment Program , the results of Work Experience Option suggest that the investment of wage subsidies for encouraging youth employment is successful because it encourages employers to take seriously the possibility of employing youth.
One factor which contributed to the success of this program was the use of Job Developers. The role of the Job Developer was to identify employers in the region who were interested in partnering with the Compass program and providing quality, on-the-job training for participants which linked to future employment opportunities. The focus was on how best to meet the employment-related needs of participants, reflecting the client-driven emphasis of the program. The New Brunswick Job Corps program also provided one intervention for participants: a guaranteed annual income for workers participating in jobs in the private, public or non-profit sectors. Although the program had the employment-related objective of providing work placement opportunities for older workers, it also had other objectives which were unrelated to labour market participation. These included: having a positive influence on economic activities in the province, improving the physical environment of communities, enhancing the quality of life of participants and stimulating a sense of belonging and contribution to the community. The evaluation noted that the program achieved positive results with respect to all these objectives. The evaluation notes that the program is effective in meeting the needs of both participants and employers. The placements offer a meaningful work experience. The work accomplished is contributing to improvements in the overall quality of the environment and to improvements in the overall quality of life for participants. And, finally, many participants indicated that they would have remained on some form of income support had they not been offered a job opportunity through New Brunswick Job Corps. However, based on the very limited information from the formative evaluation, only one-third of those who had completed the program and were interviewed for the evaluation had full-time employment after program completion. Evidence from the evaluations of the Compass and New Brunswick Job Corps programs suggests that the single-faceted interventions may not be particularly effective for those facing multiple barriers to employment. The exception was the initial success of the Work Experience Option component which may be attributed to the identification of appropriate employers and good matches between participants and employers.
Multi-Faceted Interventions Four Strategic Initiatives offered multi-faceted programs or services to those facing multiple employment barriers:
Clients presenting multiple barriers to self-sufficiency need more monitoring, better planning, and longer periods of support, and may need a sequence of training projects and work experiences. Although it is too early to assess the long term impact of these programs, two key features have been identified as contributing to successes in working with this population: offering an array of programs or services to clients, and tailoring activities to meet the specific needs of individual clients. Several evaluations note the importance of a multi-prong approach. For example, the evaluation of Taking Charge! noted that the program illustrated that comprehensive programming is needed to enable those with multiple barriers to attain economic independence. Substantial and sustained services are required before positive outcomes can be observed. Each of the multi-faceted programs for this population included some or all the following types of services:
When only some of these services were available, the need for additional services was often highlighted in the program evaluation. The evaluation of the Investing in People program (Northwest Territories) identified serious gaps which the program was unable to address, including problems with participant attendance, the low skill and literacy levels of participants, and the inability to overcome other specific barriers (such as financial barriers, lack of child care, and personal problems such as substance abuse).
Clients presenting multiple barriers to self-sufficiency need individualised programs to allow them to take advantage of the range of services being offered to address their specific needs and motivate them to participate in the program. For example, a key feature in the Taking Charge! program (Manitoba) was the development of individualised plans that led to training or employment, with ongoing supports provided throughout the process. Similarly, the evaluation of the Investing in People program noted that training paths have to be developed for those who complete their interventions to ensure that individuals can progress steadily toward their personal and career goals. The evaluation noted that training and work experience projects should not be viewed as a one-time intervention.
Designing programs that are responsive to individual needs not only contribute to addressing specific barriers to employment but also contribute to motivating clients to participate in program activities. The Investing in People program discovered that problems arise if clients are not motivated to participate. Program participation was to be voluntary with selection being made by a community-based committee. However, more than half of those who entered the program did not complete it. A number of participants believed that they were required to participate and some had their social assistance benefits suspended when they left the program early. The evaluation noted that the resulting negative feelings could cause these individuals to avoid any future initiatives designed to assist them. On the other hand, the Taking Charge! program (Manitoba) attempted to facilitate program participation and access to employment by making sure that a range of convenient services was available. The program attempted to accommodate clients by making program services available in the evening and by providing one-stop convenience with an on-site employment income assistance office for clients to pick up their cheques. A well-equipped day care facility was made available for short-term use. A computer laboratory and an “executive closet” with free clothing were made available for clients seeking employment. Participants received a small daily allowance in addition to their income assistance. The program also provided an employment facilitator to assist clients in developing career plans and obtaining pre-employment training, skills development and job placements.
Yet there are challenges to the implementation of individualised approaches. The Integrated Training Centres for Youth was innovative in providing incentives to participants to allow and/or encourage them to attend and complete the training programs. It was expected that these incentives would be determined on a case-by-case basis based on individual assessments. However, agencies found it difficult to assess individual client needs and instead used a grid (based on living arrangements and number of children) to set incentive rates. This raises the debate between fairness and individualisation. The grid provides for a fairer allocation of incentives among participants but removes the benefit of a more individualised approach, which might more adequately respond to individual participant needs. There is evidence that other funds have been used to “top up” incentives, suggesting that the use of grids is not meeting client needs. 2.3 Conclusions It is too early to assess the extent to which Strategic Initiatives have been able to reduce reliance on government assistance. However, the experiences, as reflected in the formative evaluations, provide some lessons with respect to this programming objective. The lessons vary according to both the target client group and the type of programming undertaken. Both wage subsidies and self-employment supports have been used to promote job creation. The key to job creation is in linking human resource development programming to economic development plans, particularly at the local, as opposed to provincial, level. This contributes to the sustainability of the employment and, particularly with respect to the non-profit sector, to avoiding “make-work” projects. The principal risk in programming for those clients who have single (or limited) barriers to employment — primarily youth — is that of dead-weight loss. If clients have limited barriers, then there is greater likelihood that they would have got the job without program support. However, in spite of the risk of dead-weight loss, the Strategic Initiatives evaluations suggest that the small investment which governments make in programming for this target group has the potential to reduce the risk of future dependency. The evaluations suggest that targeted wage subsidies work well for this target group, many of whom have a perceived (but not an actual) employment disadvantage. The subsidy allows the employer to try out a potential employee whom they might otherwise avoid and allow that employee to prove his/her worth. For the higher need groups — those facing multiple barriers to attaining economic independence — more comprehensive programming is needed to address these barriers. Substantial and sustained services are required before positive outcomes can be observed. The programming needs to be designed to meet individual needs, and clients must be motivated to take part. Programs need to be “sold” to clients. It is premature to look to the formative evaluations for results for this target group. However, some evaluations do suggest that it may be important to focus not only on employment as an outcome, but also to consider other, less tangible, more short-term benefits such as positive changes in the client’s willingness to learn, improvement in life and personal skills, and increases in self-esteem.
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